SDC Weekly 138; Owning the Pipes - Why owning the boutique isn't enough
Ariel Adams on pre-owned prices being flawed proxy for brand health, Kollokium Projekt 02, Paul Graham on quartz and brand identity, finding the signal in all this noise, and more!
🚨 Welcome back to SDC Weekly! This edition was supposed to be around 25 minutes, but as usual, I read something at the 11th hour and have decided to include it here at the top.
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Ariel Adams raised an interesting point in his recent post, Why Used Prices Dominate Industry Confidence. His general point is that the watch industry has a data problem - “no sh1t”, you might say. Specifically, he argues that pre-owned price indices (a la WatchCharts, Chrono24, Bloomberg Subdial Index) have become a proxy for ‘brand health’, when in fact, they are really just a proxy for brand popularity. Anyone who has ever eaten at a Michelin-starred restaurant with a three-month-long waitlist and sh1t food in small portions will tell you - popularity is not the same thing as quality!
Overall, he points out that the watch industry guards its data closely, so analysts default to the one thing that is freely available - pre-owned asking prices - and then draw sweeping conclusions about brand health from what is, at best, a popularity contest. Adams then argues that sales volume is a better metric, but goes on to concede it’s basically unmeasurable. He also points out that most tracked prices are asking prices, not sold prices, which is a big problem but at least it’s one we’re all acutely aware of.
Where we align
His ask-vs-sold price distinction is important and one could argue it isn’t discussed enough. Regular readers will recall that we covered exactly this problem when looking at the divergence between the Bloomberg Subdial Index and WatchCharts back in 2024 - we have two indices tracking ostensibly the same market, but producing different results because of differences in methodology, data cleaning, and how they handle discounting.
Adams is making the same point when he says the data most people cite isn’t as clean as the charts make it look. Anyone who has listed a watch on Chrono24 and then sold it for 15% below ask already knows this anyway. This reminds me, he’s actually describing a textbook instance of the streetlight effect1 i.e. using data because it’s visible rather than because it’s useful.
He’s also right that auction prices often tell you more about the competitive dynamics between six wealthy bidders than about global demand for a product. The F.P. Journe results at the end of 2025 were extraordinary, but extrapolating from them to “the brand is worth X” is really just a category error. Those prices were set by a very small number of people with very specific motivations, and not by “the broader market” in any meaningful sense.
Where we don’t align
The trouble starts when you notice what Adams doesn’t do, which is offer any alternative. His preferred metric is sales volume but by his own admission, this is unmeasurable. So the essay essentially says: “the data everyone uses is sh1t, the data I’d prefer doesn’t exist, but trust the people who travel to markets and talk to insiders.” This is an appeal for people to defer to authority - more specifically to the authority of people like... Ariel Adams. 😂
This isn’t meant to be a joke, but it’s pretty funny to me. When Adams argues that the best insights come from “constantly traveling to various parts of the market to study what is happening on the ground and with consumers,” he’s describing his own value proposition. Of course, that doesn’t make him wrong, but it’s worth keeping in your peripheral vision.
Now about a month ago, Ariel argued brands should embrace lower prices to drive volume and keep Swiss factories going strong. If you pair that sentiment with today’s argument that ‘low pre-owned prices signal healthy volume and not brand weakness’, the combined position is as follows: sell more, at lower prices, and when all those watches flood the secondary market and prices drop, that’s all good too.
Really? I mean, it’s logical if you’re optimising for factory utilisation, but much less sensible if you’re a collector who’d prefer the thing on your wrist to hold its value, or if you’re a brand that wants to preserve whatever brand equity you have left. Adams is giving advice to the industry of course; but collectors and enthusiasts reading this should remember they’re eavesdropping on someone else’s conversation. I also just think it’s bad advice overall, but that’s a separate topic for another day.
What can we do about this?
Adams left us hanging, so let’s try and fill in the blanks ourselves. If pre-owned prices are a flawed signal but sales volumes are also not readily available, what should we look at?
Triangulation instead of indexing is a good place to start. Pre-owned prices are one input, not the input. The idea is to cross-reference pre-owned prices with other information like AD allocation patterns (are waitlists growing or shrinking? how long did your mate wait for a Submariner?), CPO uptake (Rolex’s RCPO now reportedly controls 10% of global Rolex secondary sales, which is a legit signal), and grey market discount depth (if a new watch is available at 30% below retail on the grey market, that tells you something about demand regardless of what any report says). Oh, and with pre-owned prices, maybe I am stating the obvious but always search for ‘sold’ prices not ‘ask’ prices - send DMs if you have to, but trust nobody completely. 😂
Absolute values are less important than the spread. What I mean by that is the pre-owned price falling from 120% of retail to 100% is a completely different signal to one falling from 80% to 60%. The former could be defined as ‘speculation unwinding’; the latter could be a good signal of demand dropping. In short, the relationship between market price and current retail is more important than the price itself.
Watch what brands do, and attach less value to what they say. Pay attention to things like boutique openings or closings… or to production cuts or production expansion (admittedly harder to do without deep monitoring). Another signal might be to notice whether they are launching CPO programmes or ignoring the secondary market. The gist of this point is to point out that behavioural signals are harder to fake than any price chart.
Finally, try to zoom out a bit more. Monthly pre-owned price fluctuations are mostly noise, and quarterly trends are maybe signal. Annual trends can sometimes be useful, but even then, things like tariffs can muddy the water substantially. If you’re checking WatchCharts weekly and adjusting your collecting strategy accordingly, wtf are you reading SDC for!?
In conclusion… I’d say Adams is right that the industry’s got a data problem, and that too many people draw sweeping conclusions from thin evidence. However, I do not think the answer is to abandon data in favour of vibes and frequent flyer miles2. Just don’t forget you are buying a watch to wear - it is not a share you’re buying to trade. If the thing on your wrist makes you happy every time you look down at it, no price index will ever take that away from you.
Admin note: The Unofficial Editor declined to check this edition because he’s currently volunteering at the blood bank. We panicked about sending this out completely unedited, but he just told us to B positive. Please click here to read this post online and ensure you see all corrections made after publishing.
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Estimated reading time: ~32 mins